Former Central Bank Governor Arjuna Mahendran, whose tenure was plagued by scandal and controversy, went home (Singapore) on Friday afternoon on Emirates 348.

Although he is no longer the Central Bank Governor nor is he in the country, the political crisis he left behind, which threatened to dismantle the United National Front for Good Governance (UNFGG) Government, was only averted by appointing Dr. Indrajit Coomaraswamy as the Governor.

“After consulting all parties relevant, I appointed Dr. Indrajit Coomaraswamy to head the Central Bank of Sri Lanka,” President tweeted Saturday morning and the President’s Media Unit issued an official statement announcing Coomaraswamy’s appointment, a few hours later.

Considering that the Prime Minister last week appointed Coomaraswamy to a committee tasked to prepare a report on improving economic relations with the rest of Asia, it can be assumed that the Prime Minister would be the happiest of this appointment. Among the members of the above mentioned committee are Charitha Ratwatte, who Wickremesinghe insisted must replace Mahendran, R. Paskaralingam, one of PM’s close allies and Arjuna Mahendran.

In addition while Wickremesinghe has shown a willingness to change his nominees, as long as his desired outcome is achieved, President Maithripala Sirisena had insisted on one person, Nandalal Weerasinghe who is the most senior Deputy Governor in CBSL.

While it is acknowledged that Coomaraswamy is extremely professional, he also holds views that are antithetical to many Sri Lankans. He views the Economic and Technology Cooperative Agreement (ETCA) with India favourably and was a part of the negotiating team.

Tug-of-War between MS and RW

The tug-ofwar between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe regarding the appointing of a new Central Bank of Sri Lanka Governor had pushed the United National Front for Good Governance (UNFGG) to the breaking point. Even by Friday afternoon the two men had not reached a consensus regarding whom to appoint as Wickremesinghe was still adamant on appointing Charitha Ratwatte as the Central Bank head, a demand he sent in writing, while Sirisena wanted to appoint Deputy Governor Nandalal Weerasinghe.

Despite the almost universal animosity, except of those who are close to Wickremesinghe, against Mahendran, the Premier attempted to extend the tenure of the former Central Bank Governor even on 30 June, Mahendran’s last day.

At a meeting of the Monetary Board convened suddenly on Tuesday, Deputy Governor P. Samarasiri, a Mahendran loyalist, placed a letter from the Attorney General which stated that an ‘acting’ appointment was permissible. Mahendran then proposed Samarasiri as acting Governor, which was objected to by Treasury Secretary Dr. R.H.S. Samaratunga, who stated that there was no such provision in the Act for such an appointment.

On the same day the Prime Minister and Malik Samarawickrama sought an audience with the President over the appointment.

Earlier that day the President tweeted that he will appoint a new governor to the Central Bank within a few hours and at the Cabinet Press Briefing which commenced at 11:00 a.m. State Minister of Finance Lakshman Yapa Abeywardena reiterated the point adding that someone ‘experienced’ will be appointed. This was a reference to Nandalal Weerasinghe who is the most senior Deputy Governor. The President has told his close allies that he would visit the Central Bank in the evening, talk to the Deputy Governors and appoint Nandalal Weerasinghe as the next Governor.

However, after it was reported that both Sirisena and Wickremesinghe had visited the Central Bank, a series of phone conversations occurred between Sirisena allies who had sensed that something had gone wrong. Sirisena had not invited Wickremesinghe to accompany him and in a way the Premier had gatecrashed into what was to be a confidential meeting between the President and Deputy Governors.

“The protocol is that the President arrives after the Prime Minister. If the President had invited the Prime Minister to come, he would have come after Wickremesinghe. However, the Prime Minister arrived after the President. He had also invited Arjuna Mahendran to the meeting. How could the President have talked freely with the Deputy Governors when both Wickremesinghe and Mahendran were there? “So it turned into a general discussion,” said a senior United National Party (UNP) MP.

After the meeting was over the Prime Minister insisted that if Mahendran’s tenure is not extended, Charitha Ratwatte should be appointed the next Central Bank Governor. A request the President rejected and after leaving the meeting it is reported that the Prime Minister threatened to pull out of the unity government.Of course this was reported to the President who was obviously upset as he had dissolved Parliament last year in a bid to save Wickremesinghe’s reputation after the COPE committee led by DEW Gunasekara threatened to publicize its findings on the first alleged Treasury Bond scandal.

Sources close to the President said that he was adamant to appoint Nandalal Weerasinghe and that there is enormous pressure from his closest advisors not to give in to the demands of Wickremesinghe. However, it seems that the President once again gave up on a pet idea to appease the Prime Minister, like he did with the 20th Amendment.

Why Ranil insisted on Ratwatte?

Charitha Ratwatte has been working with Ranil Wickremesinghe for decades, and in the 1970s and 80s he was renowned for his capacity for work and efficiency. His tenure as the Chairman of the National Youth Services Council is still known as the golden era of the institution. Whenever Wickremesinghe has come into power he has appointed Ratwatte to key positions and currently he holds the position of Senior Advisor to the Prime Minister.

While Ratwatte’s early career has been universally commended, the role he played during the 2001–2004 United National Front government and the last 18 months of the UNFGG government has been widely criticized. The controversial ‘Regaining Sri Lanka’ initiative, which was widely criticized by various stakeholders, was the brainchild of Ratwatte

“Ratwatte is one of the key figures that led to the defeat of the United National Front (UNF) administration. His ‘Regaining Sri Lanka’ initiative was not only condemned by the general public but also by some of the staunchest UNPers. Ratwatte’s appointment will lead to the implementation of neo- liberal economic policies, which will ensure austerity, which has proven ineffective across the world; increased taxation and enforce the corrupt systems created by the Rajapaksa administration and sustained by men like Arjuna Mahendran,” Rajith Keerthi Tennakoon, the advisor to the Anti Corruption Front (ACF) who revealed the second Treasury Bond scandal said.

He alleged that the Prime Minister is adamant on appointing one of his nominees as he feared the appointment of Dr. Nandalala Weerasnghe or anyone else loyal to the President would be the beginning of a serious prosecution against Mahendran.

“The COPE was not given the necessary data to proceed by the CBSL. If Weerasinghe was appointed the COPE and other investigative bodies would have been given access to data regarding the two Treasury Bond scandals,” he said.

Tennakoon, who also held a key position during the UNF government, claimed that many UNP leaders had criticized not only the ‘Regaining Sri Lanka’ initiative but the austerity measures imposed by Wickremesinghe and his allies. “This is a familiar tale. The Prime Minister behaved in a similar manner between 2001 and 2004. He antagonized former President Chandrika Bandaranaike Kumaratunga and pushed her into a corner so that she lashed out, which was natural. He is doing the same thing now.

The UNP social media unit kept attacking those who opposed the Prime Minister’s views. President Sirisena has been very patient and accommodative of Wickremesinghe. He cared so much that he dissolved Parliament last year to save Wickremesinghe, in doing that he gave up his pet project of electoral reforms which would have been passed soon after 19A. I will not be surprised if the President appoints a third party who is qualified,” Tennakoon said.

Political fallout

The appointment of Dr. Coomaraswamy seems to have averted a political crisis that might have led to the dismantling of the UNFGG Government. However, the events that transpired last week, i.e. the tug-of-war between the President and the Premier which stretched Sirisena’s patience to its limits, is a bad omen for the Unity Government. What transpired last week, is particularly worrying because this was exactly how Wickremesinghe behaved with then President Chandrika Bandaranaike.

Both Wickremesinghe and Bandaranaike come from a similar social background, hold similar world views and yet Wickremesinghe sidelined Bandaranaike from important decisions, forgetting that she was the Executive President. While the 19th Amendment to the Constitution stripped some of the powers of the Executive President and despite his hesitancy in using the powers vested in his office, Sirisena is still very much all powerful and Wickremesinghe must keep that in mind to avoid a repeat of 2004.

10 Responses to How Coomaraswamy was appointed as CBSL Governor

Appointment of Dr Coomaraswamy is a disastrous option.
This person is not in touch with the hard working, amude wearing taxpayer of this land. He is a traitorous Englishman, educated in Royal College and brainwashed in Harrow.
His sister, who was a big-wig in the (terrorist) United Nations, was an open supporter of Uncle Velu and his cyanide-wearing teenage rag-tag army.
The Yahapalanaya is drowning; they fear to hold prov Council and Local Government elections because they fear Super Mahinda.
It is only a matter of time before our beloved Mahinda is Prez, Gothabhaya, the PM, Basil, the FM and Local Development Minister and Namal, Justice, Finance and Economic Affairs Minister.
The day it happens, the amude-wearing taxpayer will be rejoicing and also, enjoying life as a citizen of this Sinhala Buddhist Land.

If Arjuna Mahendren found not guilty it can be interpreted as his tenure not extended. Like his successor (UK national) Mahendren is Singapore national and as far as I know under contract sort of arrangements. Besides both of them come from same stables (Royal College)!!!

In addition to Anthony’s comments on appointment of Indrajit Coomarasamy. I wish to add the following:
Indrajith Coomaraswamy was one of the two founding directors of Galleon Research Services which was a fully owned subsidiary of Galleon International Management LLC – Convicted Insider Trader, Raj Rajaratnam’s company.
He served as director in this company for two years until it was voluntarily dissolved in August 2010. It was Coomaraswamy himself who applied to dissolve the company.
In 2011 Raj Rajaratnam was found guilty of all 14 charges of insider trading against him. Rajaratnam was arrested in October 2009 and Coomaraswamy was working with him when the scandal came out into the open.

From the frying pan to the fire.
That’s where the Nation is heading.
The former CB Gov, Bond Mahendran was lead by his SIL, maximising profits in bond trading with the blessings of his FIL.
Now we have Indra-shit who will be receiving instructions from his former employer in a New York prison, the convicted insider trader and open supporter of the Velu Movement, Raj Rajaratnam.

Mirza,
You are doing well, my brother.
Bondy M flew to Singapura ignoring summons by COPE.
Now we have white-haired Indra-shit conducting bond auctions; another couple of billion dollars down the drain.
The amude-wearing taxpayer will soon pay more VAT for tea, sugar and rice.

at this rate we will have no one to fill that post relax give the educated gentleman a chance to do his job after all he still has not come to office yet but lots of criticism against him, we Sri-Lankans are famous for complaining over everything.

This guy has not got any axademic achievements to talk about for he spent more time to foster his cricket careeer and even that he did not go far. Like his sister his achievements professionally was more due to political connections and name dropping and eton harow connections even that lacks any clout in the UK and elsewhere least of all in Sri Lanka. Wikipedia lists a string of jobs this guy has had in the past and for some obscure reason had not stayed long enough to contribute anything meaningful.
Finally assignment was
Coomaraswamy rejoined the Commonwealth Secretariat in 2010 as Interim Director of its Social Transformation Programme Division.[8][10][14][15] He was special advisor to the controversial Galleon Group hedge fund.[15] He was director of a British company called Galleon Research Services Limited, a wholly owned subsidiary of Galleon International Management LLC.[17][18] He was appointed as a non-executive director of John Keells Holdings PLC in February 2011.[14][19] He was appointed as a director of Tokyo Cement Group in March 2011.[14][16][20] He worked briefly for Hatton National Bank and was a director of SEEDS (Guarantee) Limited.[13][16][21] He was a member of the University of Sri Jayewardenepura’s Board of Study (Public Administration) and a director of Nawaloka College of Higher Studies.[22][23] He was later a senior advisor to Minister of Development Strategies and International Trade Malik Samarawickrama.[24][25]
Strangely the Ranil/Sirisena looks favorably with those connected with galleon of Rajaratnam fame
and most likely he is looking for stashing the few millions at the Central Bank courtsey Coomaraswamy

You have hit the nail on the head Zama.
The CB Gov boasts of an inspiring academic career. His speech yesterday to CB staff drew a plethora of yawns.
He is definitely a con-man, not sticking to any place for long (perhaps because his outdated economic theories are exposed.)
Lots of people survive and grow because of their names; Indra-shit Commarasami son of Raju Coomarasami, sister of Radhika Coomarasami. Names matter a lot. They all come from Ananda Coomarasami, the independence winning hero (or traitor who sold the nation to Britishers, depends on how you look at it).
All fart and no shit, my friend AUJ.
Fundamentally, Indra-shit is not a son of the soil; he is doomed to fail.